Is maintenance your core competency?

How to determine whether the responsibility for equipment reliability should be in-house or outsourced.

The benefits of reliability-centered maintenance (RCM) are well-documented. Yet, despite the recognized advantages of optimized equipment uptime, many organizations aren’t quite there yet. Some simply don’t have the necessary resources to pull themselves out of firefighting mode long enough to monitor asset conditions and schedule maintenance with equipment health in mind. Some have chosen not to make healthcare of physical assets a core competency. But how does a company or a plant decide whether to contract services from an outside vendor, whether it’s for complete maintenance and reliability or it’s for specific services, such as vibration, thermography, ultrasound, or corrosion monitoring?

“Depending on what part of the maintenance services or organization that is under consideration for contracting, the steps may vary,” explains Stanley T. Grabill, CMRP, principal industry consultant, reliability and maintenance, Honeywell Advanced Solutions. “Based on experience in outsourcing inspection services for corrosion monitoring of vessels and piping systems, much of these activities are consistent through the decision process.”

Complex technologies require expertise and specialization, explains Joe Bruno, director, training and development, SKF USA. “Companies want to focus on what they do and making what they make,” he says. “Doing this in-house usually means asking people to take on responsibility for several technologies without the focus to become proficient in them. Contract MRO services allow companies to outsource these functions to people who specialize in these technologies, people who focus on them as a full-time career. These services are provided by someone who is using these technologies every day, gaining experience, and getting training as a full-time practitioner.”

The decision to outsource needs to start with a hard and honest look at whether your current maintenance program needs improvement, recommends Mark Cox, director of technical training and advanced systems at Advanced Technology Services. “It’s important early on that executive leadership supports the decision to consider exploring or outsourcing maintenance,” he advises. “Without the assurance and support of leadership, things can get derailed easily or often. At the heart of the outsourcing question is always whether maintenance, or specific services, is truly a core competency. A customer of ours says, ‘Nothing in my plant happens without the equipment running.’ If critical machines can’t produce product, business suffers. And this is the very reason outsourcing makes sense. ‘Important’ no longer means doing it internally. If maintenance is getting enough attention to sustain best practices and it’s recognized as being extremely important, then outsourcing must be considered.”

Mike Bacidore is chief editor of Plant Services and has been an integral part of the Putman Media editorial team since 2007, when he was managing editor of Control Design magazine. Previously, he was editorial director at Hughes Communications and a portfolio manager of the human resources and labor law areas at Wolters Kluwer. Bacidore holds a BA from the University of Illinois and an MBA from Lake Forest Graduate School of Management. He is an award-winning columnist, earning a Gold Regional Award and a Silver National Award from the American Society of Business Publication Editors. He may be reached at 630-467-1300 ext. 444 or mbacidore@putman.net or check out his Google+ profile.

An organization needs to collect the appropriate stakeholders and then identify and agree upon exactly what benefits they are expecting by contracting out maintenance services, says Andy Ginder, principal, Allied Reliability Group. “Are they looking for the vendor to provide them with lower costs, higher quality services resulting in better equipment OEE, or reduced labor relations issues?” he asks. “Identifying these items in advance helps establish criteria against which competing vendors can be evaluated and also creates a performance baseline.”

Sanjay Karve, director of innovation and transformation group, manufacturing, Tata Consultancy Services, recommends performing a risk analysis of the equipment. “At one end of the spectrum, where the equipment or process is unstable and the service providers in the market do not have the capability to service end-to-end, an organization should not source out the entire maintenance,” he cautions. “Rather, discrete services such as vibration or thermography, which are required to ensure continuous operation, should be procured. At the other end of the spectrum, under circumstances where equipment is stable and provides commodity services, and the capabilities of the service providers are very mature, the organization should consider contracting entire MRO services. Between these two extremes, the decision is driven more by internal core competencies and differentiation criteria. An organization should start by doing a comprehensive risk analysis to understand applicability of a strategy to an equipment or group of equipment. Once this is decided, standard procurement practices can be leveraged to contract the relevant services.”